Coal power in terminal decline, NSW warned

Economists have warned NSW the market for coal-fired power is in terminal decline and it must begin preparing for alternatives.

The Institute for Energy Economics and Financial Analysis's report on Thursday paints a bleak future for the coal industry, where global trade volumes contract an average of four per cent every year.

About three-quarters of all the coal Australia exports for electricity generation comes from NSW.

Most passes through the Port of Newcastle, which accounts for more than 10 per cent of global coal exports.

The IEEFA report warns the outlook for new coal-fired power stations in Asia, Australia's main export market, has changed dramatically in the past four years.

It cites the "unprecedented decline" in the cost of renewable energy generation and the increase in renewable energy projects coming online.

"While the Australian coal industry and its lobbyists continue to maintain that the nation's thermal coal export industry is booming on the back of record export revenues, the reality is very different," the report says.

Finding finance for new projects was also cited as a key difficulty for the sector.

Indian mining giant Adani announced on Thursday funding issues had led it to scale back plans for its massive Carmichael coalmine in Queensland.

The IEEFA's analysis lent on Independent Energy Agency forecasts on the basis the world meets internationally agreed objectives on climate change, air quality and universal access to modern energy.

However, NSW's mining industry said a different IEA report suggested coal consumption in Southeast Asia will more than double in the next two decades.

"The NSW thermal coal sector is enjoying healthy conditions with expert independent analysis forecasting this to continue to at least 2040," the NSW Minerals Council said in a statement.